Manhattan Home Prices Break $2 Million Barrier for the First Time

A backlog of luxury condo sales closing pushed up average prices

By Kathryn HopkinsOriginally published on April 01, 2016|Mansion Global|

The average cost of a home sold in Manhattan in the first three months of 2016 crashed through the $2 million barrier despite recent evidence of a slowdown at the top end of the housing market.

Prices jumped 18.5% compared with same period a year earlier to $2.05 million, according to new research by appraisal firm Miller Samuel on behalf of Douglas Elliman Real Estate.

Jonathan Miller, president of Miller Samuel, told Mansion Global that much of the boost was due to luxury sales that had been in contract the last 18-plus months in some of Manhattan’s most expensive new buildings. These pending sales closed in the first quarter of 2016, pushing average prices to a new high.

The condo market once again led the way, with average prices rising 33.9% to a record $2.9 million in the first quarter compared with the same period last year as sales increased 33.1% to 1,378.

In contrast, average prices in the co-op market fell 12.3% to $1.28 million on the back of the number of sales sliding 7.8% to 1,499 units sold. Most of these were resales and not new developments.

“Co-op sales dropped partly because the inventory has remained stubbornly low. This is consistent with the national market. Low supply constrains sales,” Miller said.

“The other part is that there has been a lot of interest over last five years in the condo market and that’s where all marketing and growth has disproportionately occurred.”

More recently, however, there has been anecdotal evidence of a slowdown in the luxury condo market. While Manhattan experiences oversupply of luxury condos, investors remain nervous amid global economic uncertainty and the U.S. presidential election.

The research also found that the average number of days a property spent on the market fell 7% to 93 days compared with a year ago, while the average listing discount was 2.1%, down from 4.7%.

Finally, despite price growth being more rapid in the condo market, the most expensive home sold in the first quarter of this year was a $35.3 million apartment in 101 Central Park West.